2013 (10) TMI 1227

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....e very issuance of the notice dated 18.12.2006. 2. The assessment year in issue is 2001-02. 3. The petitioner is an Indian company engaged in the construction business. On 30.10.2001, the petitioner filed its return of income under Section 139(1) of the Act. The petitioner declared an income of Rs.5,18,40,270/-. The petitioner during the relevant financial year of 2000-01 paid managerial remuneration to its Directors in excess of the limits prescribed under the Companies Act. As the managerial remuneration was in excess of the limits prescribed, the petitioner filed an application with the Department of Company Affairs seeking approval of the Government in relation to the same. The permission sought for by the petitioner was rejected by t....

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....for issuance of the same. 7. The objections raised by the petitioner, inter alia, were that the proceedings were prohibited by law as the same had been initiated after the expiry of the period of four years from the end of the relevant assessment year and in terms of the proviso of Section 147, no action could be taken under Section 147 of the Act unless such income had escaped assessment by reason of the failure on the part of the petitioner to disclose fully and truly all material facts for its assessment. The petitioner further objected that it was a clear case of change of opinion. 8. The petitioner contended that there was no failure on the part of the petitioner to disclose fully and truly all the material facts and that all primary....

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....use of the Assessee." 10. Aggrieved by the said order, the petitioner has filed the present petitions. We have examined the record of the case and also the Income Tax Returns originally filed and are of the view that the re- opening cannot be sustained. 11. The petitioner in Schedule 9, Notes to the Accounts has mentioned as under:- "2. Remuneration to Managing Director:   March 31, 2001 Amount (Rs.) March 31, 2000 Amount (Rs.) Salary & Allowances 3,784,672 3,357,921 Company Leased Accommodation 1,800,000 1,800,000 Other Perquisites (Actual and/or evaluated as per Income - Tax Rules, 1963   485,852 401,457 Total 6,070,524 5,559,378 The company has become a subsidiary of a Public Company under Section 4(7) of the....

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....or that in fact they are germane and relevant to the subjective opinion formed by the Assessing Officer regarding escapement of income. (v) In cases where the first proviso applies, there is an additional requirement that there should be failure or omission on the part of the Assessee in disclosing full and true material facts. Explanation to the Section stipulates that mere production of books of accounts or other documents from which the Assessing Officer could have, with due diligence, inferred material facts, does not amount to "full and true disclosure of material facts". (The proviso is not applicable where reasons to believe for issue of notice are recorded and notice is issued within four years from the end of assessment year.) 13....